Morning Outlook 5th May, 2022

NIFTY:

Nifty opened at 17096.60 with a minor gap up of just 27 points. The index recorded its intraday high at 17132.85 and started drifting downwards.

Initially, the decline was slow and modest but as the rate hike news comes the downside momentum becomes very strong and the index moved down very sharply to record its intraday low at 16623.95.Minor rallies in between did not sustain long and prices kept on falling and finally closed at 16677.60 near its intraday lows with a loss of 391.50 pints or 2.29% down. All the sectoral indices have participated in the downside move and closed lower led by the MEDIA, METAL, and REALTY which ended more than 3% lower followed by the BANK, AUTO,PHARMA, and FINANC IAL which ended more than 2% lower.

The short-term trend changes to down which was sideways before. The support is now visible around 16500 while the previous support zo ne inside16900 – 17000 should now act as a resistance. The volatility index INOIA VIX rose today suggests volatility is increasing. The index needs to fall to around 15 -18 levels for stability in the market. As of now, we should not indulge ourselves in trading and avoid trading the index.

 

BANK NIFTY:

Bank Nifty opened at 36266.15 wit h a gap up of 138 points. The index did not sustain there and moved down after recording its intraday high at 36309.30. The decline continued for the whole day and minor rallies in between fizzled out quickly. The index recorded its intraday low at 35127.85 and finally closed at 35317.55 wit h a loss of821points.PVT and PSU BANKS both have performed almost the same today, saw a sharp intraday decline, and closed lower by 2.42%& 2.81% respectively. Within the index, in terms of points, KOTAK BANK contributed the highest while HDFC BANK contributed the lowest.

We have been tracking a trading range with support around 35500 and resistance around 37000.This range decisively broke on the downside giving us a pattern target of around 34000.This breakdown changes the short-term trend to down.

TECHNICAL PICKS

DERIVATIVE PICKS

TOP DELIVERY PERCENTAGE

UPCOMING ECONOMIC DATA

NEWS UPDATES

• The Reserve Bank of India (RBI) announcing on Wednesday an out-of-policy hike in repo rate by 40 basis points (bps) to 4.4 per cent with immediate effect and a 50 bps hike in the cash reserve ratio (CRR) to 4.5 per cent took the markets by surprise, said analysts, who expected the central bank to hike rates only in June. “The hike in rates, though was expected, was only likely to come through in the June policy review. The quantum of hike (40 bps) in this out-of-turn announcement was also a surprise as the markets expected the RBI to hike by 25 bps. Going ahead, the indexes will take cues from what the US Fed and the other global central banks do to tame inflation.

• Kotak Mahindra Bank reported a 50 per cent year-on-year (YoY) jump in consolidated net profit in the Q4FY22. Net profit totalled Rs 3,892 crore in Q4FY22 versus Rs 2,589 crore in the same period last year. On a full year basis (FY22), the consolidated net profit was up 21 per cent at Rs 12,089 crore, over the previous year. On a standalone basis, which represents the banking operations, the lender’s net profit was up 65 per cent YoY at Rs 2,767 crore in Q4FY22, beating Street estimates, as it wrote back Covid-19 provisions amounting to Rs 453 crore in the quarter.

• Agro-chemicals major UPL on Wednesday said it has acquired a naturally-derived fungicide, OptiCHOS, for its natural plant protection (NPP) business unit. The NPP portfolio houses natural and biologically derived agricultural inputs and technologies, UPL said in a BSE filing. The active ingredients of OptiCHOS were developed from the chitin-rich by-products of the shellfish industry by BioCHOS, a spin-off of the Norwegian University of Life Sciences.

Source: Economic Times,  Indian Express  ,Business Today, Livemint, Business Standard, Bloomberg Quint

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